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Northport Securities Law Blog

Passing The Buck On False Statements

Brokers who sell investments based on false information may very well find themselves facing sanctions by the SEC. That's what happened in the case of Lorenzo v. SEC. In this case, a broker was accused of sending potential investors emails that contained false information to solicit investment in Waste2Energy Holdings, Inc.

Who "made" the statement?

The lawsuit held when the broker had sent false information to the investors, that he had violated Rule 10b-5(b) of the 1934 Securities Exchange Act, which prohibits "making" false statements in securities transactions. In this case, however, a judge ruled that the false statements did not originate with the broker himself, but with his boss. His boss had created (or, "made") the misleading information, which was passed along to investors by the broker. 

Baby Boomers, blockchain and boiler rooms

As an investor, you are always looking for a new market or a piece of information that will give you a competitive edge. When discovering new information on the latest opportunities, you are rightfully skeptical of some and seize upon others. The integration of technology in our daily routines has opened up a new realm of possibilities in both our professional and personal lives, but with that, a new field of risks too.

What risks are emerging for investors in online markets?

Puerto Rico: USB brokers lose arbitration case

Puerto Rican brokers have been in the news for failing to ethically invest on their clients' behalf. Most recently, Investment News reported that two claimants were awarded $793,077.61 by UBS. They charged UBS Financial Services and UBS Financial Services of Puerto Rico with a number of investment violations after the clients purchased municipal bonds with them. These violations include: misrepresentation, negligence, failure to uphold their fiduciary duty and a several other ethical problems. What can you do if you suspect that your broker is not acting in your best interests?

Did your broker misrepresent investment information?

You trusted a broker to manage a portion of your money, hoping to increase your savings before retirement. However, something does not seem right. They lost a large portion of your investment, but they did not give you a satisfactory answer as to why. It may be time to take a deeper dive into your investments, and make sure that everything is in order.

When a broker loses a substantial amount of what you believed to be a relatively safe investment, check into the possibility of misrepresentation.

Madoff Is In Prison, But His Victims Haven't Seen A Penny

Bernie Madoff is in prison, serving a 150-year sentence after pleading guilty to numerous felony charges for bilking investors out of billions of dollars. However, just because the drawn-out criminal case is over does not mean the matter is resolved. Far from it.

According to an article from Forbes, victims of Madoff's scheme have yet to receive any money from the $4 billion fund set up to repay them 5 years ago.

How Seniors Can Protect Themselves From Investment Fraud

Investing is exciting, and it's easy to get caught up in the promise of fast money. That being said, investment fraud is unfortunately all too common - especially among seniors. Sadly, many scammers attempt to prey on older people, as they believe they may be able to get easy money this way. It's important to take the following five steps to ensure that you or an older loved one are not the victim of an investment scam.

1. Do your research and ask questions. Be sure to do some research on the company you're going to trust with your money. Many fraudulent organizations simply prey on the fact that many people do not look into the company before they hand over their assets. Research the company online, and talk to family, friends and fellow investors to ensure that someone you trust has heard of the company before. If an investment deal sounds too good to be true, remember - it probably is.

Beware Arbitration Clauses On Financial Products

The Consumer Financial Protection Bureau (CFPB) is currently seeking public comment on new proposed rules that would prohibit mandatory arbitration clauses on consumer financial products. This is good news for consumers who might one day find themselves with a grievance against a financial company like a bank or a credit card company. 

Arbitration clauses are elements of contracts stating that either party may require that any dispute be handled by a private aribtrator instead of going to court. Arbitration clauses can crop up in any commercial contractual agreement. In the consumer financial world, arbitration clauses can crop up when people sign up for bank accounts or credit cards. Signing a contract without really looking at it carefully can mean signing your rights away should you have an issue with the company at a later date. 

Have You Looked Up Your Broker's History?

Broker misconduct is a major problem and a risk for investors who put their hard-earned money into the trust of financial advisors who are supposed to protect their wealth. In 2016, United States Senators Elizabeth Warren (D-Mass.) and Tom Cotton (R.-Ark.) wrote a letter to the financial industry regulatory authority (FINRA) requesting information about what the agency was doing to address adviser misconduct, recidivism and firms that employ a notably large number of brokers with a history of misconduct.

The senators' letter pointed out that according to a 2016 National Bureau of Economic Research (NBER) study, 1 in 13 financial advisors have some sort of misconduct on their record, and one-third of those with a history of misconduct are repeat offenders. In firms that habitually employ brokers with a misconduct history-- usually preying on elderly or less educated investors--one in five advisers was found to have a record of misconduct. 

$18.5 Million FINRA Arbitration Award Against UBS; 2 Investors Represented By Timothy J. Dennin Compensated

The Financial Industry Regulatory Authority (FINRA) has reported an $18.5 million record security arbitration decision against UBS Financial Services to clients who invested in Puerto Rico closed-end municipal bond funds. The clients were represented by the prominent securities and investor rights attorney Timothy J. Dennin.

The plaintiffs, Rafael Vizcarrondo and Mercedes Imbert De Jesus, sought to be reimbursed $19 million for damages and $1.2 million in commissions and fees. The claims involved violation of contract, breach of fiduciary duty and other securities violations.

Contact A Manhattan Investment Fraud Lawyer With Extensive Experience

For a free consultation with an experienced New York City securities litigation lawyer, contact the law firm of Timothy J. Dennin, P.C., by calling 866-437-9475.

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